 "Tata Power swings to profit in second quarter despite tariff woes")
Consolidated net profit stood at Rs 74.97 crore for the three months to September 30, lower than an average of Rs 120 crore forecast by analysts, according to Thomson Reuters data.
The company had reported a loss during the same period last year, mainly on account of a one-off additional impairment charge of Rs 250 crore due a change in the long-term foreign currency outlook at its main plant.
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The company, part of the salt-to-steel Tata Group, has looked to shrug off a worsening economic climate at home to expand its operations overseas with projects in South Africa, Georgia and Southeast Asia.
But its flagship Mundra plant in the western Indian state of Gujarat is bleeding as it is forced to sell power at a loss, despite a ruling by a federal regulator as far back as April that paved the way for a tariff increase. Its clients - state-run power utilities - have so far resisted the rise.
The losses from the Mundra plant - one of a clutch of 4,000 megawatt power projects that the Indian government has pushed to kick-start generation for its energy-starved economy - prompted Tata to consider selling some investments to reduce its debt. It has also put on hold any major expansion plans.
Tata's pain is shared by other privately-owned utilities who have struggled to make money and expand in Asia's third-largest economy, as problems ranging from fuel shortages to land acquisition hurt their progress.
Shares in Tata Power, which has a market capitalisation of close to $3 billion, were up 1.2% by 0913 GMT, in a Mumbai market that gained about 1%.
The stock has lost nearly 30% this year, falling the most among the 27 largest electrical utility companies in the Asia-Pacific region, according to Thomson Reuters StarMine.
According to StarMine SmartEstimates, which collates recent forecasts by top rated analysts, Tata Power is expected to lag on earnings per share growth in the next twelve months compared to its regional peers.